1. If an investor has a long position in a particular stock, she a borrowed the stock to sell it b. owns the stock e expects the price of the stock to decline d. two of the above e. all of the above 2. You are attempting to maximize your profits through a long position in a particular stock. One strategy, which we discussed in class, would be to purchase the stock at a low price through a and to later exit the long position through a a. market order, stop order b. limit buy order, limit sell order c. stop loss order, stop order d. market order, limit buy to cover order e limit short sell, limit buy to cover order 3. Gains from a long position are a theoretically unlimited b. always zero since a long position is perfectly hedged by design c. limited to the price of the stock at the time of the purchase d. two of the above e none of the above 4. If you short 100 shares of FGR when the price per share is $10 and then cover the short position when the price is $15 per share, what is the result (assume no transaction costs)? a. A loss of $500 b. A loss of $1,500 c. A gain of $1,500 d. A gain of $500 e. None of the above 1 13 MacBook Air PIL FO % 5 & 5. When you short sell a you can make money when prices are appreciating b. potential profits on a single share are limited to the price of the stock at the time of the short c. potential losses are theoretically infinite d. two of the above e. all of the above 6. You are attempting to maximize your profits through a short position in a particular stock. One strategy, which we discussed in class, would be to use a to enter the short position and to use a to exit the short position a. limit short sell order, limit buy to cover order b. stop order, stop-loss order c. limit buy order, limit sell order d. limit buy to cover order, limit short sell order e none of the above